DFS Furniture says FY profits in line, but market 'significantly worse than expected'

Nonetheless, the living room and upholstered furniture retailer said market conditions had been "significantly worse than expected".

According to the company, market volumes shrank by 15-20% during the year.

Group chief executive officer Tim Stacey however focused on the positives, saying that

"We are in the strongest position we have ever been as a Group in terms of market share, and when the market recovers, we will be well placed to deliver our strategy and grow our earnings and cash flows towards our longer term plan."

Underlying profit before tax and brand amortisation for the 52 weeks finishing on 25 June was pegged at "slightly above" £30m, helped by continued improvement in gross margins.

Boosting margins, freight costs had returned to their levels prior to the pandemic with management also crediting its effective cost control.

For the financial year ahead, DFS said trading had been in line with expectations sincethe start of the same.

The decline in volumes was expected to slow to a mid-single digit rate, although the outlook remained "uncertain", it added.

But management was focusing in maximising its operating cashflow with profit seen coming in slightly ahead of the previous year's level.

As of 0927 BST, shares of DFS were declining by 3.16% to 110.20p.